Samenvatting
The use of the London Underground's Strategic Policy Analysis Model (SPAM) to determine fare and service levels is described. This paper is concerned with the effects of policy changes when private transport is the alternative. Changes are measured in a) underground capital and operating costs, b) underground customer consumer surplus, c) the demand for other goods and services and d) the `roads externality'. Economic and financial objectives cannot be achieved simultaneously. The trade-off between economic and financial objectives is discussed. The setting of optimal fare and service levels and the setting of fare and service levels to maximise profits are examined.